United States Government Accountability Office
GAO
Report to the Chairman, Committee on
Government Reform, House of
Representatives
July 2004
HOMELAND
SECURITY
Transformation
Strategy Needed to
Address Challenges
Facing the Federal
Protective Service
GAO-04-537
a
July 2004
HOMELAND SECURITY
Highlights of GAO-04-537, a report to the
Chairman, Committee on Government
Reform, House of Representatives
With responsibility for protecting
thousands of federal facilities, the
Federal Protective Service (FPS),
which transferred from the General
Services Administration (GSA) to
the Department of Homeland
Security (DHS) in March 2003,
plays a critical role in the federal
government’s defense against the
threat of terrorism and other
criminal activity. GAO was asked to
determine what challenges, if any,
FPS faces now that it has been
transferred from GSA to DHS.
We are recommending that DHS (1)
direct FPS to develop a
transformation strategy that
addresses its significant challenges;
(2) initiate a dialogue with GSA to
resolve disagreement over billing
issues; (3) take immediate steps to
ensure that funds collected from
agency rents and fees are used in
the future solely for facility
protection; and (4) ensure that DHS
is prepared to integrate FPS
mission-support functions before
these functions are transferred,
even if the target date has to be
extended. DHS concurred with
recommendations 1, 3, and 4. DHS
and GSA continue to disagree on
whether FPS has the authority to
bill agencies for its services. As
such, we added recommendation 2
after receiving comments from DHS
and GSA to encourage a resolution
of this disagreement.
www.gao.gov/cgi-bin/getrpt?GAO-04-537.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Mark L.
Goldstein at (202) 512-2834 or
goldsteinm@gao.gov.
Transformation Strategy Needed to
Address Challenges Facing the Federal
Protective Service
FPS faces a number of significant challenges now that it has been transferred
from GSA to DHS. These relate to its expanding mission and increased
responsibility, unresolved issues about how it will be funded in the future, and
the transfer of FPS mission-support functions to DHS.
•
Expanding mission and increased responsibility. FPS has responsibility
for securing approximately 8,800 GSA government-occupied facilities and
as a result of the transfer, plans to take on additional DHS facilities. FPS
might also seek authority to protect other federal facilities. FPS’s mission
has also expanded to include other homeland security functions, such as
support for efforts to apprehend foreign nationals suspected of illegal
activity. In light of these changes, however, FPS does not have a
transformation strategy to address its expanding mission, as well as the
other challenges it is facing.
•
Unresolved issues related to funding. As part of GSA, FPS was funded
from security fees that were included with tenant agencies’ rent payments.
It has not been decided if FPS will begin billing agencies. DHS believes
that FPS lacks the authority to bill agencies for facility protection, but GSA
disagrees with DHS. Also, GSA has historically covered a shortfall
between the cost of security and security fees collected. In commenting
on this report, DHS and GSA said that for fiscal year 2005 the President’s
budget includes an increase in the FPS security rate that, if enacted, will
eliminate the shortfall. Related to funding, we also found that FPS’s
involvement in homeland security activities not directly related to facility
protection is inconsistent with a requirement in the Homeland Security Act
of 2002 that FPS funding from agency rents and fees be used solely for the
protection of government buildings and grounds.
•
Transfer of mission-support functions to DHS. FPS still relies on GSA
for mission-support functions, such as travel services, payroll, and
contracting support. DHS plans to assume these functions by the end of
fiscal year 2004. However, assuming these functions prematurely could
affect FPS’s ability to accomplish its mission. For example, FPS relies
heavily on contract guards and is dependent on GSA’s contracting
management software to write contracts, track costs, and make vendor
payments.
The Federal Protective Service Protects Thousands of Federal Facilities
Contents
Letter
Results in Brief
Background
Expanding Responsibilities Pose a Challenge for FPS
Issues Related to How FPS is Funded
Successfully Transferring FPS Mission-Support Functions to DHS
Will Be Challenging
Considering Key Practices Could Help FPS Address Challenges and
Achieve a Successful Transformation
Conclusions
Recommendations for Executive Action
Agency Comments and Our Evaluation
1
2
3
6
12
18
22
27
28
29
Appendixes
Appendix I:
Appendix II:
Appendix III:
Appendix IV:
Figures
Scope and Methodology
36
Comments from the Department of Homeland Security
38
Comments from the General Services Administration
43
GAO Legal Analysis of Issues Concerning FPS Activities Not
Related to Facility Protection
54
Figure 1: FPS’s Location within DHS’s Organizational Structure
Figure 2: FPS Officers Engaged in Biological and Chemical
Weapons Response Training
Figure 3: FPS Officers Assisting with Crowd Control
Figure 4: Key Practices for Successful Mergers and Organizational
Transformations
Page i
5
9
11
23
GAO-04-537 Federal Protective Service
Contents
Abbreviations
DHS
GSA
FPS
BTS
ICE
PBS
INS
FAMS
NIH
OMB
U.S. Department of Homeland Security
U.S. General Services Administration
Federal Protective Service
Border and Transportation Security
Immigration and Customs Enforcement
Public Building Service
Immigration and Naturalization Service
Federal Air Marshal Service
National Institutes of Health
Office of Management and Budget
This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.
Page ii
GAO-04-537 Federal Protective Service
A
United States Government Accountability Office
Washington, D.C. 20548
July 14, 2004
Leter
The Honorable Tom Davis
Chairman
Committee on Government Reform
House of Representatives
Dear Mr. Chairman:
Attention to the physical security of federal facilities has increased since
the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma
City. The September 11, 2001, terrorist attacks further heightened this
concern and led to the consolidation of 22 agencies into the Department of
Homeland Security (DHS). This report responds to your request for
information on the transfer of the Federal Protective Service (FPS) from
the General Services Administration (GSA) to DHS, where FPS is now part
of the Border and Transportation Security Directorate’s (BTS) component
known as Immigration and Customs Enforcement (ICE). In creating DHS,
the government’s efforts to prevent, protect against, and respond to
potential terrorism were centralized. The establishment of a new federal
department is an enormous undertaking that, in the case of DHS, comes
with significant risk, which is why we designated the implementation and
transformation of DHS as a high-risk area in January 2003. In addition, we
also designated federal real property as a high-risk area affecting several
agencies, due in part to the major challenge of protecting federal real
property from terrorism.
Our objective was to determine what challenges, if any, FPS faces now that
it has been transferred from GSA to DHS. To do this work, we collected and
analyzed agency documents about the transfer. This included policies and
procedures, information about the organizational structure, and
information on other issues related to the transfer, such as funding. We
assessed the reliability of the data we used and found that they were
sufficiently reliable for the purposes of this report. We also interviewed
DHS, FPS, and GSA officials responsible for, and directly affected by, the
transfer. More information on our scope and methodology appears in
appendix I. We conducted our work in Washington, D.C., between
September 2003 and May 2004 in accordance with generally accepted
government auditing standards.
Page 1
GAO-04-537 Federal Protective Service
Results in Brief
FPS faces a number of significant challenges now that it has been
transferred from GSA to DHS. These relate to its expanding mission and
increased responsibility, unresolved issues about how it will be funded in
the future, and the transfer of FPS mission-support functions to DHS.
• FPS has responsibility for securing approximately 8,800 GSA owned or
occupied federal facilities and plans to take on responsibility for,
according to FPS, approximately 2,500 additional DHS facilities. FPS
officials also discussed the possibility of expanding FPS’s
responsibilities to include protection for facilities where GSA had
previously delegated authority to tenant agencies—FPS identified 20
agencies with delegated authority, including the Departments of
Defense, Interior, and State. DHS has also expanded FPS’s mission to
include other functions related to homeland security, such as providing
backup to other DHS law enforcement units in the field in efforts to
apprehend foreign nationals suspected of illegal activity and assisting
with crowd control at major protests. Despite these changes and the
major transformation FPS is facing, FPS does not have an overall
strategy for how it will carry out its expanding mission, as well as meet
other challenges it faces. For this reason, we are recommending that
FPS develop such a strategy for its own transformation. In commenting
on this report, DHS concurred with our recommendation to develop a
transformation strategy for FPS. DHS said that it was developing a
strategic plan for FPS that would address our recommendation.
Although this plan was not issued when we finalized this report, it is
important to note that a transformation strategy goes beyond what is
typically contained in a strategic plan. Specifically, a transformation
strategy would include overall goals for the transformation with specific
action plans and milestones that would allow FPS to track critical
phases and essential activities.
• In addition to these formidable mission-related challenges, there are
unresolved issues related to funding FPS’s operations. When FPS was
part of GSA, tenant agencies’ rental payments included security fees that
GSA used to fund FPS operations. Now that FPS is part of DHS,
determining the appropriate funding approach for FPS has centered on
whether GSA will continue to bill agencies for FPS’s services, which
DHS supports, or whether FPS should take on this function, as GSA
would prefer. Comments from DHS and GSA showed continued
disagreement on this issue. As such, we have added a recommendation
to DHS aimed at resolving the disagreement. Also, GSA has historically
Page 2
GAO-04-537 Federal Protective Service
covered a gap that has existed between the cost of protection provided
by FPS and the security fees collected from tenant agencies—GSA said
that this gap was $139 million in fiscal year 2003. In commenting on this
report, DHS and GSA also noted that, for fiscal year 2005, the President’s
budget includes an increase in the FPS security rate that, if enacted, will
eliminate the shortfall between FPS collections and the cost of security.
Also related to funding, we found that FPS’s involvement in homeland
security activities not directly related to facility protection is
inconsistent with a requirement in the Homeland Security Act of 2002
that FPS funding from agency rents and fees be used solely for the
protection of government buildings and grounds. DHS said that FPS’s
involvement in activities not directly related to facility protection did
not affect its primary mission. However, this is still a concern because of
the specific legal requirement that agency rents and fees be used solely
for facility protection. We are recommending that the Secretary of
Homeland Security take immediate steps to ensure that funds collected
from agency rents and fees are used in the future solely for the
protection of government buildings and grounds. DHS concurred with
this recommendation but had concerns about our interpretation of the
statute, which are discussed in more detail in the report.
• Another challenge facing FPS is its reliance on GSA for mission-support
functions such as payroll, travel reimbursement, and contracting
support. DHS and GSA did not meet an original goal to transfer these
functions by the end of fiscal year 2003. According to DHS, FPS, and
GSA officials, the delay was caused by issues related to how DHS
systems would be integrated, DHS’s focus on integrating larger
departmental components, and difficulties extracting FPS activities
from GSA systems. DHS officials said that they intend to have FPS fully
integrated by the end of fiscal year 2004. However, assuming these
functions prematurely could affect FPS’s ability to accomplish its
mission. For example, FPS relies heavily on contract guard services, but
according to DHS officials, is dependent on GSA’s contracting
management software for tracking costs and managing vendor
payments. As such, we are recommending that the Secretary of
Homeland Security ensure that DHS is prepared to effectively integrate
FPS mission support before these functions are transferred from GSA.
DHS concurred with this recommendation.
Background
FPS was established in 1971 as the uniformed protection force of GSA
government-occupied facilities. FPS has authority, among other things, to
Page 3
GAO-04-537 Federal Protective Service
enforce laws and regulations aimed at protecting federal property and
persons on such property, and to conduct investigations on, federal
property.1 FPS was originally located within GSA’s Public Building Service
(PBS). As part of PBS, FPS was responsible for providing law enforcement
and security services to GSA’s tenants and the public at about 8,800 federal
buildings nationwide. As of September 30, 2003, FPS data show that FPS
had approximately 1,100 uniformed officer full-time equivalents (FTE)2 and
13,000 contract guards to protect GSA-owned or -occupied facilities. In
addition, these data showed that FPS had 353 management and missionsupport FTE. In addition to managing security at GSA-held facilities, FPS
officers also provide other security services such as developing risk
assessments, installing security equipment, and conducting criminal
investigations.
In response to the 1995 bombing of the Alfred P. Murrah Federal Building in
Oklahoma City, FPS began enhancing its strategy for protecting federal
facilities and making additional security improvements at GSA facilities.
FPS officials said that FPS also began relying more on the use of contract
guards to provide security and law enforcement protection at its facilities.
FPS currently employs approximately 13,000 contract guards. The level of
physical protection services FPS provides at each building varies. In some
cases, FPS has delegated the protection of facilities to tenant agencies,
which may have uniformed officers of their own or may contract separately
for guard services.
The September 11 terrorist attacks resulted in a renewed emphasis on
protecting federal facilities and the nation against terrorist activities. The
attacks prompted Congress to pass the Homeland Security Act, which
created the Department of Homeland Security (DHS). The new
department’s mission, among other things, is to prevent terrorist attacks
within the United States, reduce the vulnerability of the United States to
terrorism, and minimize the damage and assist in the recovery from attacks
that do occur. The act combined 22 federal agencies specializing in various
disciplines, such as law enforcement, border security, biological research,
computer security, and disaster mitigation. As a result of the creation of
1
40 U.S.C.A. § 1315.
2
Civilian employment in the executive branch is measured on the basis of full-time
equivalents (FTE). One FTE is equal to one work year or 2,080 nonovertime hours. For
example, one full-time employee counts as one FTE, and two half-time employees also
count as one FTE.
Page 4
GAO-04-537 Federal Protective Service
DHS, FPS was moved from GSA to the new department, effective March 1,
2003. Within DHS, FPS became part of the Border and Transportation
Security Directorate’s (BTS) component known as Immigration and
Customs Enforcement (ICE). BTS is tasked with securing the nation’s
borders and safeguarding its transportation infrastructure. ICE is the
investigative and law enforcement arm of BTS and is composed primarily
of the investigative components that were formerly part of the U.S.
Customs Service (Customs) and the Immigration and Naturalization
Service (INS). ICE also includes FPS, the Federal Air Marshal Service
(FAMS), and a number of other offices. Figure 1 shows FPS’s location
within DHS’s organizational structure.
Figure 1: FPS’s Location within DHS’s Organizational Structure
U.S. Department of Homeland Security
Secretary
Under Secretary of
Emergency
Preparedness and
Response
Under Secretary of
Science and
Technology
Transportation
Security
Administration
Office of
Investigations
Office of
Intelligence
Air and Marine
Operations
Under Secretary of
Border and
Transportation
Security
Under Secretary of
Information Analysis
and Infrastructure
Protection
Immigration and
Customs
Enforcement
Customs and Border
Protection
Detention and
Removal
Operations
Federal Protective
Service
Under Secretary of
Management
Federal Air
Marshal
Service
Source: FPS.
The transfer of FPS is only one of a number of organizational transfers and
related changes that DHS is managing. While DHS faces the challenge of
protecting the nation from terrorism, it is also tasked with combining a
disparate group of agencies with multiple missions and unique cultures.
Recognizing that the establishment of a new department is an enormous
undertaking, GAO designated the implementation and transformation of
Page 5
GAO-04-537 Federal Protective Service
DHS as high-risk in January 2003. This designation is based on three
factors: (1) the size and complexity of the undertaking, (2) the merging
agencies have an array of existing management challenges, and (3) failure
by DHS has potentially serious consequences.3 In January 2003, GAO also
designated federal real property as a high-risk area in part because of the
major challenges agencies face in protecting federal real property from
terrorism.4
Expanding
Responsibilities Pose a
Challenge for FPS
Under the Homeland Security Act, DHS became responsible for protecting
buildings, grounds, and property owned, occupied, or secured by the
federal government that are under GSA’s jurisdiction.5 In addition to GSA
facilities, the act also provides FPS with the authority to protect the
buildings, grounds, and property of other agencies whose functions were
transferred to DHS.6 This effectively meant that FPS, which was merged
into DHS, would continue its role as the security and protection force for
GSA real property assets as well as DHS properties not held by GSA, and
would be performing this function as part of DHS.7 A March 2003
operational memorandum of agreement between GSA and DHS made FPS
responsible for the same types of security services for GSA facilities that
FPS provided before the move to DHS. These include performing risk
assessments, managing the installation of security equipment, and
conducting criminal investigations. With regard to non-GSA properties, this
amounts to approximately 2,500 properties that were held by DHS
components and were not part of the GSA real property inventory,
according to the FPS chief of staff. This official said that in fiscal year 2005,
FPS would collect information, determine the risk categories, and identify
existing law enforcement and protective measures at each DHS facility.
3
U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington,
D.C.: January 2003).
4
See GAO-03-119 and U.S. General Accounting Office, High-Risk Series: Federal Real
Property, GAO-03-122 (Washington, D.C.: January 2003).
5
40 U.S.C.A. § 1315 and 6 U.S.C.A. § 203.
6
40 U.S.C.A. § 1315.
7
In technical comments on this report, the U.S. Secret Service said that FPS plans to take on
responsibility for protecting DHS facilities not otherwise protected by the U.S. Secret
Service in connection with its protective responsibilities under 18 U.S.C. § 3056, or
otherwise under the control of the U.S. Secret Service.
Page 6
GAO-04-537 Federal Protective Service
FPS plans to use this information to develop a strategy that lays out how
FPS can take over responsibility for security at the 2,500 additional DHS
properties. FPS’s chief of staff told us that it might take a number of years
before FPS fully assumes control of security at these facilities.
The Director of FPS said that eventually FPS might seek to expand its
responsibilities to include protection for facilities where GSA had
previously delegated authority to tenant agencies, as well as other facilities
where agencies have protective forces with missions similar to that of FPS.
The Director of FPS stressed that expanding FPS’s authority further is a
long-term vision and that FPS is still examining the feasibility of different
options. FPS provided information identifying 20 agencies where GSA had
previously delegated some of its authority for facility protection or contract
guard services. This included various facilities occupied by the
Departments of Defense, Agriculture, Commerce, Health and Human
Services, Interior, Justice, Labor, State, and Transportation. The Director of
FPS said that, in addition, a number of agencies have their own security
forces and that it does not make sense for the federal government to have
multiple security forces, all charged with facility protection. An example
FPS provided was the National Institutes of Health (NIH), which has a
small police force charged with protecting NIH’s Bethesda, Maryland,
campus. FPS officials added that the Homeland Security Act, in their view,
provides FPS with the authority for extending FPS’s protection
responsibilities because it provides the Secretary of Homeland Security
with broad authority in implementing actions deemed necessary to protect
against terrorism.8 In commenting on a draft of this report, DHS said that
we took the comments of the Director out of context. DHS also had
concerns with our summary and synthesis of the relevant statutory
requirements FPS has that are related to FPS’s responsibility for protecting
federal buildings, grounds, and property. DHS’s comments and our
evaluation of them are discussed in more detail in the agency comments
section of this report.
FPS Has New Law
Enforcement Authority and
Assists with Other DHS
Activities
In addition to increased responsibility in terms of the number of buildings
under its control, the Homeland Security Act gave FPS new law
enforcement authority for use in carrying out its facility protection mission.
This new law enforcement authority empowers officers and special agents
8
6 U.S.C.A. § 111.
Page 7
GAO-04-537 Federal Protective Service
to take action off of federal property to protect the property and the
public.9 It also allows officers to enter into agreements with state and local
law enforcement personnel to carry out activities that promote homeland
security. Previously, FPS officers were not authorized to enforce laws off of
federal property and, for example, would have to contact local law
enforcement personnel to handle illegal activity on the street in front of
federal buildings, if it were to occur. FPS officials said that the new
authority would better allow them to protect facilities and become more
involved in intergovernmental activities aimed at promoting homeland
security, such as biological and chemical weapons response training (see
fig. 2).
9
40 U.S.C.A. § 1315.
Page 8
GAO-04-537 Federal Protective Service
Figure 2: FPS Officers Engaged in Biological and Chemical Weapons Response
Training
Source: FPS.
DHS has also broadened FPS’s responsibilities to include assisting with
homeland security activities that are not directly related to facility
Page 9
GAO-04-537 Federal Protective Service
protection. For example, FPS officials said that FPS officers have provided
backup for other DHS law enforcement officers in immigration-related
work, such as “Operation Predator,” a program aimed at arresting foreign
nationals involved in child pornography. In addition, FPS officials said that
FPS officers assisted with various DHS activities—such as crowd control at
the free trade protests in Miami, Florida, and protection for major national
events such as the Olympics. At the time of our review, FPS’s Web site also
listed other activities, including support for security at the Kentucky Derby,
which did not relate directly to federal facility protection. We also noted
instances where the press reported on FPS participation in other activities,
such as involvement in sobriety checks and safety patrols in San Francisco,
California. FPS officials said that participation in these activities was
intended to enhance FPS’s integration into DHS and that FPS’s
participation in these types of activities will likely continue. FPS’s
involvement in these activities, and, more specifically, issues related to how
they are funded, will be discussed in more detail later in this report and in
appendix IV. Figure 3 shows FPS officers assisting with crowd control at a
protest.
Page 10
GAO-04-537 Federal Protective Service
Figure 3: FPS Officers Assisting with Crowd Control
Source: FPS.
FPS’s expanding mission and increased responsibility represent a
formidable change for the agency. Transferring to a new federal department
is a significant undertaking for any organization. Yet FPS—like several
other DHS components—is transferring to DHS while simultaneously
focusing on new issues that reflect fundamental changes since September
11 in how the government approaches homeland security issues. In our
report designating the establishment of DHS as a high-risk area, we
Page 11
GAO-04-537 Federal Protective Service
emphasized that the magnitude of the responsibilities, combined with the
challenge and complexity of the transformation, underscores the
perseverance and dedication that will be required of all DHS’s leaders,
employees, and stakeholders in order to achieve success.10 The Director of
FPS agreed with our assessment that the mission-related changes FPS is
facing represent a formidable challenge. However, our work showed that
FPS does not have a strategy for how it will carry out its expanding mission
and increased responsibility, as well as meet the other challenges it is
facing. FPS’s need for such a transformation strategy, as well as its belief
that it is embracing these changes as an opportunity for a positive
transformation, are discussed in more detail later in this report.
Issues Related to How
FPS is Funded
Maintaining a means of funding FPS that will ensure the adequate
protection of federal facilities and allow FPS to meet new homeland
security responsibilities is another challenge. When it was part of GSA, FPS
was funded through security fees that were included with the rent
payments GSA received from tenant agencies. In March 2003, just after
FPS’s transfer, GSA and DHS agreed that for fiscal year 2004, GSA would
continue to collect security fees on behalf of FPS and transfer these funds
to DHS. DHS’s fiscal year 2004 appropriations act identifies about $424
million to be transferred from the revenue and collections in the federal
buildings fund11 to DHS for FPS operations. According to FPS officials, the
security fees GSA collects are intended to cover security standards
designated for each building. These standards cover perimeter, entry, and
10
GAO-03-119.
11
Established by Congress in 1972 and administered by GSA, the federal buildings fund is a
revolving fund in the U.S. Treasury into which federal agency rent and certain other moneys
are deposited. Moneys deposited into the fund are available, subject to congressional
appropriation, for GSA’s real property management and related activities.
Page 12
GAO-04-537 Federal Protective Service
interior security and security planning matters.12 Under this process, GSA
would bill agencies for security services on a prorated, square-foot basis,
depending on the amount of space each agency occupied. 13 In addition to
these security services, FPS also provides agencies with additional
services, upon request, under its reimbursable program. For example,
agencies may request additional magnetometers or more advanced
perimeter surveillance capabilities. For fiscal year 2004, FPS’s
reimbursable program will provide an estimated $337 million in funding for
these requests, according to FPS’s chief of staff.
The President’s fiscal year 2005 budget, released in February 2004,
proposes that security fee collections be credited to the FPS account in the
Department of the Treasury and identifies $478 million in funding for FPS.
GSA and FPS officials said that for fiscal year 2005, an approach is under
consideration whereby GSA would send tenant agencies separate bills for
security and rent. Instead of collecting security fees with agency rental
payments, tenant agencies would send the security fees directly to the FPS
account at Treasury. Under this approach, these officials said that these
funds would not pass through the federal buildings fund. In addition,
estimates in the President’s 2005 budget for the reimbursable program
remained at $337 million, unchanged from fiscal year 2004. In its written
response to several funding questions we posed to FPS officials, DHS said
12
The Department of Justice’s June 1995 report, Vulnerability Assessment of Federal
Facilities, designated security levels I through V into which federal buildings were
classified. Fifty-two minimum standards were established, with level I having 18 minimum
standards and level V having 39 minimum standards. Examples of minimum standards
include lighting with emergency power backup for all buildings (perimeter security),
intrusion detection systems for building levels III through V (entry security), visitor control
systems for building levels II through V (interior security), and standard armed and unarmed
guard qualifications/training requirements in all buildings (security planning). FPS uses
periodic risk assessments to validate the current security standards and countermeasures in
place at each facility as well as determine additional security enhancements based on
identified threats.
13
GSA security fees consisted of two separate components: basic and building-specific
service fees. Basic security fees cover security services provided by FPS to all GSA tenants
and include such services as patrol and response, security surveys, alarm monitoring,
salaries, and other common cost items. This fee is included in each rent bill on a cost-persquare-foot basis. Building-specific security fees are for security measures specific to a
particular building based on its designated security level. For example, a level IV building
may have more guards, magnetometers, and cameras than a level I building. Buildingspecific fees are also charged to GSA tenants based on the square feet they occupy in the
building. In technical comments on this report, the U.S. Secret Service pointed out that
some agencies occupying commercial space do not receive services from FPS, but are
required to pay for FPS benefits at a basic charge per square foot.
Page 13
GAO-04-537 Federal Protective Service
that FPS was exploring potential future funding strategies that would
better support the expanded mission and revised law enforcement
responsibilities associated with the transfer to DHS. Although no decisions
have been made regarding how FPS will be funded in the future, DHS, FPS,
and GSA officials indicated that discussions to date have centered on
whether GSA would continue its practice of billing agencies for security
services or whether this should be done by FPS. In DHS’s written response
on funding issues, DHS took the position that billing individual agencies for
the security services FPS provides for GSA buildings was GSA’s
responsibility.
Specifically,
• DHS said that the billing process and equitable distribution of security
costs among the occupants of federal buildings is inherently a real
estate function. As such, distributing security costs is similar to
distributing utility costs, operation and maintenance costs of major
building mechanical systems, and other shared costs. For federal
buildings in GSA’s inventory, DHS said that this responsibility is
specifically reserved for GSA.
• DHS said that the Homeland Security Act made it clear that GSA would
continue to be responsible for all real estate-related functions, such as
collecting rents and fees, including fees collected for protective
services.14
• DHS said that the transfer of FPS to DHS makes it clear that the primary
mission of FPS is to protect buildings and grounds owned or occupied
by the federal government and the persons on the property.15 According
to DHS, FPS does not have the mission or authority to establish a
separate, duplicative billing and collection process, similar to the one
presently established and operated in support of the GSA real estate
mission.
DHS added that one possible approach would entail FPS providing GSA
with the estimated total costs for its basic law enforcement and protective
services. Under this approach, which amounts to FPS billing GSA in one
14
6 U.S.C.A. § 232.
15
Pub.L. 107-296, Section 1706(b)(1).
Page 14
GAO-04-537 Federal Protective Service
lump sum for its services, GSA would then determine the best method for
distributing these costs equitably among the tenant agencies. FPS would
also provide separate cost estimates for the additional costs that are
associated with specific buildings, and GSA would determine the
appropriate distribution of these costs among the tenants occupying the
building. GSA officials we interviewed had a markedly different view from
that of DHS on whether GSA or FPS should bill agencies for security
services in the future. According to the Deputy Commissioner of the Public
Buildings Service and a GSA budget official, GSA does not want to be
involved in billing agencies for FPS security services. These officials said
that GSA feels very strongly about this because GSA no longer has control
over setting security rates and the level of security required at each
building.
In addition, in commenting on a draft of this report, GSA provided a legal
analysis that disagreed with DHS’s position that FPS lacks authority to bill
agencies for security services. GSA said that it considers incorrect any
implication that GSA is responsible for billing and collecting fees owed to
DHS for FPS-furnished services and that FPS does not have the authority to
bill for such services. GSA’s complete legal analysis is included in
appendix III. GSA continued that as a matter of government efficiency, and
in the interest of avoiding unnecessary duplicative systems, GSA could
agree to continue to use its systems to produce and distribute a bill on
behalf of FPS. GSA added that while it is authorized to provide its billing
services to FPS on a reimbursable basis, this does not mean that DHS’s
billing responsibilities for FPS-provided services belong to GSA. We did not
determine whether DHS or GSA was correct in its legal analysis of issues
related to billing. However, because of the differing views of DHS and GSA,
it would be useful for DHS and GSA to engage in further dialogue so that
agreement can be reached. It would be appropriate, in our view, for DHS to
initiate these discussions, since FPS is now part of DHS. If, after further
discussion, DHS and GSA still disagree on issues related to authority for
billing, it would be worthwhile to seek resolution from the Office of
Management and Budget (OMB) or the Treasury.
Although issues related to authority for billing agencies were unresolved,
we had the following observations related to various options: having GSA
continue to bill for security fees makes FPS dependent on GSA to
implement a funding mechanism for its operations; in addition to limiting
FPS’s control over this process, this could also make it unclear which
agency is accountable to tenant agencies and other stakeholders. On the
other hand, much work would likely be needed for FPS to develop the
Page 15
GAO-04-537 Federal Protective Service
expertise, information, and systems for interfacing with GSA and tenant
agencies if FPS were to take over the billing function. For example, on the
basis of our discussions with GSA and FPS officials, FPS would need to
cover the costs of, and develop a method for, collecting up-to-date data on
buildings in the GSA inventory and agency space assignments. FPS would
also need a financial management function for billing and collections, or
DHS would have to integrate such a process into its financial management
systems.
Regarding DHS’s suggestion that a possible approach might entail FPS
providing a total estimated cost to GSA, it would be critical for FPS to
develop and provide reliable data and GSA would need assurance that FPS
was doing so. Providing reliable data would be a challenge for FPS
because, as will be discussed in more detail later, DHS faces challenges
related to integrating its component agencies’ mission support systems and
producing reliable management information. Nonetheless, DHS
emphasized in its discussion on funding issues that FPS is working to
establish the appropriate level of law enforcement and protective services
required and is developing a plan for phasing these requirements and their
related costs into subsequent budget years. DHS said that this process
would utilize historical costs, workload, benchmarks, and best practices
collected from federal, state, and local agencies that perform similar
functions.
As FPS moves forward, accurately identifying costs would also be
important because of shortfalls GSA has experienced between collections
and the cost of providing security. According to FPS’s director of financial
management and a GSA budget official familiar with FPS funding issues,
the security fees GSA charges tenant agencies historically have not been
sufficient to cover FPS operations. To address the past shortfalls, GSA has
covered the additional costs with other funds from the federal buildings
fund. For example, according to a GSA budget official, security fees in
fiscal year 2003 generated about $139 million less than it cost to fund the
basic services that FPS provides to tenant agencies. According to these
GSA and FPS officials, the shortfalls have been caused over the years by
increasing security costs and restrictions on tenant agencies’ rental
payments that were enacted in legislation. In commenting on this report,
DHS and GSA also noted that for fiscal year 2005 the President’s budget
includes an increase in the FPS security rate that, if enacted, will eliminate
the shortfall between FPS collections and the cost of security. Nonetheless,
even if this increase helps close the gap between the cost of security and
tenant payments, the accurate identification of costs still represents a
Page 16
GAO-04-537 Federal Protective Service
challenge that may need to be addressed if the mechanism for funding FPS
were restructured.
Funding for Some FPS
Activities Not Directly
Related to Facility
Protection
DHS has broadened FPS’s responsibilities to include assisting with
homeland security activities that are not directly related to building
protection. FPS officials said that these activities have primarily included
providing backup to other DHS law enforcement units in the field and that
DHS has the authority under the Homeland Security Act to engage FPS in
activities DHS deems necessary to enhance homeland security. However,
engaging FPS in these activities under its current funding structure is
inconsistent with a provision of the act that provides that funds transferred
by GSA to DHS from rents and fees collected by GSA are to be used solely
for the protection of federal buildings and grounds.16 FPS officials said that
GSA-transferred funds have been FPS’s only source of funding for the
security services it provides and that the reimbursable funds it receives
from agencies are tied to specific agency requirements. It is our position
that DHS’s use of FPS staff time and other resources for activities that are
not directly related to the protection of federal buildings and grounds is
inconsistent with the act, which limits the use of agency funds from rents
and fees to the protection of buildings and grounds owned or occupied by
the federal government.
In November 2003, we requested that DHS provide information on the
extent of FPS’s involvement in activities not related to building protection,
the legal basis for any such activities, and the reasons these activities
would be permissible in light of the act’s prohibition on the use of funds
transferred from GSA to DHS. In a written response from DHS’s Under
Secretary for Border and Transportation Security, DHS stated that it did not
keep detailed records of these activities. DHS said that FPS’s involvement
in these activities was minor, or de minimus, and that FPS only performed
an assist role. DHS added that the support FPS provided did not affect the
accomplishment of FPS’s mission and that its participation in operations
away from federal facilities was minimal. DHS indicated in its response
that these activities were permissible because they had no impact on FPS
operations and because no special equipment was procured for these
activities.
16
6 U.S.C.A. § 232.
Page 17
GAO-04-537 Federal Protective Service
We understand that FPS’s involvement in these activities was, in DHS’s
view, minor and may not have had a direct effect on facility protection. We
also understand, as DHS pointed out, that FPS’s involvement in such
activities can strengthen interoperability and bonding between FPS and
other DHS law enforcement units. However, the funding of FPS’s
involvement in these activities is a concern because of the specific
statutory language contained in the Homeland Security Act related to the
use of funds collected from agency rents and fees. At a minimum, if DHS
plans to continue and perhaps increase FPS’s involvement in these
activities, having a means of reimbursing FPS, or funding these activities
separately, would be consistent with the requirement that funds from
agency rents and fees intended for facility protection are used for that
purpose. Also, funding these activities separately would make it necessary
for DHS to track them and develop a way to account for their costs. Having
such a process would, as a result, allow for greater accountability with
regard to the deployment of FPS resources. In its written response to
questions we had during our review on funding issues, DHS said that FPS
has an established process for recouping expenses of a reimbursable
nature. DHS acknowledged that this process could also be used—within
DHS—to recoup the cost of non-facility-protection-related activities
currently being performed by FPS.
In commenting on this report, DHS again expressed its view that such
activities would not have to be reimbursed if they are of limited duration
with local offices, ad hoc, and do not increase the direct costs of FPS
operations and investment in staff. DHS said it proposes to issue guidance
to this effect. We continue to disagree with DHS on this issue and believe
that the proposed guidance would not be appropriate. The agency
comments section of this report and appendix IV contain a complete
discussion of our position.
Successfully
Transferring FPS
Mission-Support
Functions to DHS Will
Be Challenging
In addition to challenges associated with expanding responsibilities and
establishing a funding mechanism, FPS still was relying on GSA for many of
its mission-support functions. As part of GSA, FPS was not self-sufficient
with respect to mission-support functions, including payroll, travel
services, and contracting. These functions were performed for FPS by
mission-support staff located in other GSA organizational units. For
example, its contracting functions—which are integral to FPS’s mission
because of FPS’s extensive use of contract guards—were handled by the
contracting component of GSA’s Public Buildings Service. Furthermore,
FPS employees used GSA’s centralized, integrated administrative system,
Page 18
GAO-04-537 Federal Protective Service
known as FedDesk, to perform many day-to-day functions such as time and
attendance and travel requests and reimbursement. According to FPS
officials, FPS’s reliance on staff and systems outside of its organization was
different from other, larger agencies that moved to DHS and had internal
mission-support functions and systems that were transferred to DHS with
the organizations.
Recognizing that FPS faced a challenge, DHS and GSA signed a missionsupport memorandum of agreement in February 2003 so that GSA could
continue to support FPS after the transfer. Under this agreement, GSA
would provide FPS with reimbursable mission support for human
resources, payroll, information technology, and some contracting functions
until these functions were transferred to DHS. FPS officials said that funds
used to reimburse GSA for these services were to come out of agency rents
and fees originally transferred from GSA. DHS and GSA set a goal of the
end of fiscal year 2003 for this transfer. However, GSA and DHS were
unable to meet this goal and opted to extend the agreement until the end of
fiscal year 2004. According to DHS, GSA, and FPS officials that we
interviewed, the transfer of mission support did not occur for the following
reasons:
• DHS was still in the process of determining which mission support
systems it would adopt from agencies and organizations that had
transferred into DHS and how the various systems would be integrated;
• DHS management was focusing its efforts on the transfer of larger
agencies, such as INS and Customs, and DHS believed that since FPS
was being supported by GSA, DHS could focus on agencies that were
larger and were a greater priority; and
• FPS activities were deeply integrated into GSA’s mission-support
systems. For example, FPS’s e-mail, telecommunications, travel, time
and attendance, and human resource systems are all part of GSA’s
FedDesk system, and extracting them individually for use by DHS would
be difficult.
DHS officials said that they intend to have FPS mission support fully
integrated before the end of fiscal year 2004. Specifically, at the time of our
review, DHS intended to transfer FPS’s information technology support by
June 2004 and the remaining administrative systems—human resources,
travel, payroll, and contracting support—by September 2004. We did not
assess the effect that FPS’s reliance on GSA for mission support had on
Page 19
GAO-04-537 Federal Protective Service
FPS’s effectiveness in protecting facilities. In commenting on this report’s
discussion of contracting, DHS stated that the contracting function does
not pose a challenge because it has already transferred from GSA to DHS.
According to DHS, FPS has a senior contracting specialist at headquarters
who oversees policies and standards for the contract guard program. DHS
added that 24 contracting officers are currently managing FPS contracts
throughout FPS’s 11 regions. Nonetheless, we still believe that the
contracting area poses a challenge because of FPS’s continued reliance on
GSA to support this function. More specifically, although FPS has
contracting staff on line, GSA and FPS officials told us that FPS has
continued to use GSA’s contracting management software to write
contracts, track costs, and make vendor payments. Contracting support, at
the time of our review, had not been integrated into DHS’s systems. The
January 2004 mission-support memorandum of agreement between GSA
and DHS specifies that FPS will pay GSA about $544,000 for these services
for fiscal year 2004. Because contracting support is critical to FPS’s ability
to accomplish its mission due to its reliance on contract guards, a smooth
transfer of these functions will be imperative.
During our review, we also found other difficulties that FPS had
encountered related to mission support. FPS officials said that their lack of
in-house mission support resulted in instances where law enforcement
officers had to assume administrative duties. For example, according to
these officials, law enforcement personnel played a large role in resolving
problems FPS was having in October 2003 with government purchase cards
that were issued by DHS. These cards, FPS officials explained, were not
compatible with GSA’s financial systems because the DHS cards were from
a different financial institution. FPS officials acknowledged that having law
enforcement officers perform these types of functions could divert
resources from protecting facilities and participating in other homeland
security activities. Furthermore, these officials said that there has been
confusion about whether FPS should adhere to GSA or DHS administrative
policies and procedures, as well as where they should go for assistance or
to get approval for administrative issues. For example, a senior FPS official
said that in October 2003, 7 months after the transfer, DHS and GSA had not
resolved which agency would approve restored annual leave for officers
who were required to be on duty because of emergencies. In commenting
on this report, GSA said that the January 2004 memorandum of agreement
between GSA and DHS had resolved many of the issues related to
administrative policies and procedures. Also, DHS said in its comments
that related to travel, ICE has implemented an electronic travel system to
move to a more efficient travel authorization and vouchering process.
Page 20
GAO-04-537 Federal Protective Service
Clearly, FPS faces a major challenge integrating its mission-support
activities with DHS. In fact, FPS’s situation is symptomatic of the broader
mission support and information system challenges DHS is facing as a new
federal department. In our January 2003 Performance and Accountability
Series report on DHS, we reported that DHS faces considerable challenges
in integrating the many systems and processes that provide management
with decision information.17 We encouraged DHS to identify its needs in
order to build effective systems that can support the national homeland
security strategy in the future. Furthermore, DHS would be faced with the
challenge of integrating the contracting functions of its many constituent
programs and missions, some of which have had past deficiencies. For
example, in May 2002, we reported that for its import processing system,
Customs lacked important acquisition management controls.18 In July 2003,
we reported that INS did not have the basic infrastructure—including
oversight, information, and an acquisition workforce—in place to ensure
that its contracting activity is effective.19 Customs and INS concurred with
our findings and agreed to take action. These concerns about contracting
issues have implications for FPS given that it relies heavily on contracting,
through its contract guard program, to accomplish its mission. Overall,
given the concerns about DHS’s ability to integrate FPS mission-support
activities, FPS’s ability to accomplish its mission could be affected if these
functions were to be transferred prematurely. Therefore, it is important for
DHS to ensure that it can effectively integrate these functions before they
are transferred from GSA, even if it is necessary to extend the September
2004 target date.
17
U.S. General Accounting Office, Major Management Challenges and Program Risks:
Department of Homeland Security, GAO-03-102 (Washington, D.C.: January 2003).
18
U.S. General Accounting Office, Customs Service Modernization: Management
Improvements Needed on High-Risk Automated Commercial Environment Project, GAO02-545 (Washington, D.C.: May 13, 2002).
19
U.S. General Accounting Office, Contract Management: INS Contracting Weaknesses
Need Attention from the Department of Homeland Security, GAO-03-799
(Washington, D.C.: July 25, 2003).
Page 21
GAO-04-537 Federal Protective Service
Considering Key
Practices Could Help
FPS Address
Challenges and
Achieve a Successful
Transformation
Despite the challenges it faces, FPS’s transfer to DHS presents an
opportunity for a positive transformation. According to FPS officials, the
transfer has given FPS the opportunity to reevaluate its mission and assess
whether it is sufficiently organized and equipped to meet its new and
broader roles. FPS’s top management team has embraced the new role in
homeland security and is eager to become fully integrated with a law
enforcement agency. These officials added that they have begun to rethink
FPS’s approaches and priorities so that FPS can better protect federal
facilities, the employees who occupy them, and the visiting public. Fully
implementing the transfer into DHS and completing the type of
transformation FPS envisions will be critical to FPS’s long-term viability
and success. Yet, given the challenges we identified, carrying out this
transformation will be no easy task. To better ensure a successful
transformation, FPS and its stakeholders could benefit from considering
the experiences of other organizations that have undergone successful
mergers and transformations. GAO’s July 2003 report on implementation steps
to assist mergers and transformations identified key practices followed by public
and private sector organizations that have led to success.20 These key practices
are shown in figure 4 and are briefly described below. A more
comprehensive discussion of these practices and related implementation
steps can be found in our July 2003 report.
20
U.S. General Accounting Office, Results-Oriented Cultures: Implementation Steps to
Assist Mergers and Organizational Transformations, GAO-03-669 (Washington, D.C.:
July 2, 2003).
Page 22
GAO-04-537 Federal Protective Service
Figure 4: Key Practices for Successful Mergers and Organizational Transformations
Ensure top
leadership
drives the
transformation
Establish a
coherent
mission and
integrated
strategic goals
to guide the
transformation
Focus on a key
set of principles
and priorities at
the outset of
the
transformation
Set
implementation
goals and a
timeline to build
momentum and
show progress
from day one
Dedicate an
implementation
team to
manage the
transformation
process
Use the
performance
management
system to
define
responsibility
and ensure
accountability
for change
Establish a
communication
strategy to
create shared
expectations
and report
related progress
Involve
employees to
obtain their
ideas and gain
their ownership
for the
transformation
Build a worldclass
organization
SUCCESSFUL TRANSFORMATION
Sources: GAO (presentation); Photos: Photo Disc, Dynamic Graphics, EyeWire, and Ingram Publishing.
• Ensure top leadership drives the transformation—Because a merger
or transformation entails fundamental and often-radical change, strong
and inspirational leadership is indispensable. Top leadership must set
the direction, pace, and tone and provide a clear, consistent rationale
that brings everyone together behind a single mission.
• Establish a coherent mission and integrated strategic goals to guide
the transformation—The mission and strategic goals of a transformed
organization must become the focus of the transformation, define the
culture, and serve as the vehicle for employees to unite and rally around.
Mission clarity is especially essential to define the purpose of the
transition to employees, customers, and stakeholders. The strategic
goals must align with and support the mission and serve as continuing
guideposts for agency decision making.
• Focus on a key set of principles and priorities at the outset of the
transformation—A clear set of principles and priorities serves as a
framework to help the organization create a new culture and drive
employee behaviors. Focusing on these principles and priorities helps
Page 23
GAO-04-537 Federal Protective Service
the organization focus on performing mission-related activities while
maintaining its drive toward achieving the goals of the transformation.
• Set implementation goals and a timeline to build momentum and
show progress—A merger or transformation is a substantial
commitment that could take years to complete and therefore must be
carefully monitored. As a result, it is essential to establish long-term
action-oriented implementation goals and a timeline with milestones to
track the organization’s progress toward its short- and long-term
transformation goals.
• Dedicate an implementation team to manage the transformation
process—Dedicating a strong and stable implementation or integration
team that will be responsible for the transformation’s day-to-day
management is important to ensuring that the transformation receives
the focused, full-time attention needed to be sustained and successful.
Specifically, the implementation team is important to ensuring that
various change initiatives are sequenced and implemented in a coherent
and integrated way. Top leadership must give the team the necessary
authority and resources to set priorities, make timely decisions, and
move quickly to implement top leadership’s decisions regarding the
transformation.
• Use a performance management system to define responsibility and
ensure accountability for change—An organization’s performance
management system is a vital tool for aligning the organization with
desired results and showing how team, unit, and individual performance
contribute to overall organizational results. Performance management
systems can help manage and direct the transformation process. These
systems are the basis for setting employee’s expectations in the
transformation process and evaluating individual contributions to the
success of the transformation process and organizational results.
• Establish a communication strategy to create shared expectations and
report related progress—Creating an effective internal and external
communication strategy is essential to implementing a merger or
transformation. Communication is most effective when it occurs early
and often and when it is downward, upward, and lateral. Organizations
have found that communicating information early and often helps to
build trust among employees and stakeholders, as well as an
understanding of the purpose of planned changes. Organizations must
develop a comprehensive communication strategy that reaches out to
Page 24
GAO-04-537 Federal Protective Service
employees, customers, and stakeholders and seeks to engage them in
the transformation process.
• Involve employees to obtain their ideas and gain their ownership for
the transformation—A successful merger and transformation must
involve employees and their representatives from the beginning to gain
their ownership of the changes that are occurring in the organization.
Employee involvement strengthens the transformation process by
including frontline perspectives and experiences. Further, employee
involvement helps to create the opportunity to establish new networks,
increase employees’ understanding and acceptance of organizational
goals and objectives, and gain ownership of new policies and
procedures.
• Build a world-class organization—Successful organizations
continually seek to implement best practices in processes and systems
in areas such as information technology, financial management,
acquisition management, and human capital.
We did not do an in-depth analysis comparing these practices with FPS’s
transformation efforts. Nonetheless, FPS officials, including its Director,
agreed that it would be useful for FPS to consider following these
practices. FPS provided examples where it believed its efforts reflected
these practices. These related to areas such as FPS’s heavy involvement on
departmentwide teams dedicated to integrating DHS’s components,
participating in the development of a strategic plan for DHS, and improving
its core competencies in, for example, law enforcement training, so that it
is better prepared to fulfill its expanding mission and responsibilities.
However, we noted other critical areas reflected in the key practices where
greater attention could, in our view, enhance FPS’s chances of making a
successful transformation. For example, although FPS has provided input
to DHS’s strategic plan,21 which was released in February 2004, FPS has not
developed a transformation strategy of its own that reflects key practices.
Such a strategy could contain implementation goals, measures, and a
timeline that FPS could use to show progress toward its transformation. In
addition to containing goals and measures related to progress with its
transformation, FPS could use such a plan as a platform for demonstrating
its effectiveness with its mission to protect federal facilities and
21
U.S. Department of Homeland Security, Securing our Homeland: U.S. Department of
Homeland Security Strategic Plan (Washington, D.C.: February 2004).
Page 25
GAO-04-537 Federal Protective Service
performance in other homeland security activities. It could also
demonstrate how FPS’s transformation links with the broader goals and
objectives that are contained in DHS’s strategic plan that relate to facility
protection and FPS’s other homeland security activities. To be more
effective, it could also be linked to DHS’s ongoing integration efforts.
Incorporating key practices into FPS’s ongoing transformation efforts
could be particularly helpful given the significant challenges FPS is facing.
These challenges—FPS’s expanding mission and increased responsibility,
unresolved issues related to funding, and the transfer of mission support
from GSA to DHS—will complicate FPS’s transformation efforts until they
are addressed or, at a minimum, factored into FPS’s transformation
planning efforts.
In commenting on a draft of this report, DHS said that in March 2004 FPS
began developing its own strategic plan, which DHS said would support the
overall goals and objectives of the DHS strategic plan and would be
consistent with GAO’s key practices for organizational mergers and
transformations. At the time this report was finalized, FPS’s strategic plan
had not been issued. However, it is important to note that a transformation
strategy would contain information beyond what would be found in a
typical strategic plan. The agency comments section of this report further
discusses transformation strategies and what they contain.
Our past work has discussed adopting similar practices for DHS.
Recognizing that the establishment of a new department is an enormous
undertaking, we designated the implementation and transformation of DHS
as high-risk in our January 2003 Performance and Accountability and High
Risk series.22 We reported that in addition to the high risk associated with
developing a new department from a multitude of agencies, DHS is
confronted with a number of existing major management challenges from
the functions and organizations being transferred to it. We encouraged DHS
to implement some of the key practices to assist mergers and
organizational transformations discussed earlier, including clearly defining
the mission and goals of the new department, devoting sustained efforts to
transition planning, and involving employees in the transformation process.
We also recommended adopting similar practices at DHS components such
as the U.S. Coast Guard and FAMS. In our work looking at the transition of
the Coast Guard to DHS, we reported that the Coast Guard was
22
GAO-03-119.
Page 26
GAO-04-537 Federal Protective Service
experiencing numerous implementation challenges as it transitioned to
DHS.23 These challenges include developing a new strategic plan that
reflects the Coast Guard’s wide variety of missions, establishing effective
communication links and partnerships within DHS and with external
organizations, and establishing performance management systems that
incorporate the Coast Guard’s new homeland security mission. We
suggested that the Coast Guard could also benefit from implementing the
key practices for mergers and transformations. Lastly, we reported that
FAMS is facing challenges in implementing changes resulting from its
merger into DHS, including issues related to roles and responsibilities,
training, and coordination with external organizations such as
Transportation Security Administration.24 We recommended the
implementation of some of the key practices to help FAMS with such
changes. DHS, FAMS, and the Coast Guard concurred with our
recommendations. For example, in commenting on the recommendations
for FAMS, DHS said that it welcomed our proposals for using key practices
that would ultimately maximize FAMS’s ability to protect the American
people, contribute to the protection of the nation’s critical infrastructure,
and preserve the viability of the aviation industry.
Conclusions
With its critical role in protecting federal real property against the threat of
terrorism and other criminal activity, it is imperative that FPS’s transfer to
DHS and its related transformation are successful. However, in addition to
the inherent challenges any organization would face in becoming part of a
new federal department, FPS brings a set of unique challenges that have
great bearing on its ability to accomplish its mission. Given the significance
of the challenges it is facing—an expanding mission and increased
responsibility; unresolved issues related to funding, including past
shortfalls that were covered by GSA; and various mission-support issues—
FPS could benefit from a transformation strategy that effectively makes the
case for what type of organization it believes it should become and
provides a road map for getting there. Consideration of key practices that
23
U.S. General Accounting Office, Homeland Security: Challenges Facing the Coast Guard
as it Transitions to the New Department, GAO-03-467T (Washington, D.C.: Feb. 12, 2003).
24
U.S. General Accounting Office, Aviation Security: Federal Air Marshal Service Is
Addressing Challenges of Its Expanding Mission and Workforce, but Additional Actions
Needed, GAO-04-242 (Washington, D.C.: Nov. 19, 2003).
Page 27
GAO-04-537 Federal Protective Service
others have focused on to successfully transform their organizations could
be an important part of such a strategy.
Related to funding, it would be appropriate for DHS to initiate a dialogue
with GSA aimed at resolving the disagreement concerning FPS’s authority
to bill agencies for security services. Regarding FPS’s involvement in
homeland security activities not related to facility protection, such
involvement is a concern because of the requirement in the Homeland
Security Act that agency rents and fees be used solely for the protection of
federal buildings and grounds. At a minimum, if DHS plans to continue and
perhaps increase FPS’s involvement in these activities, having a means of
reimbursing FPS, or funding these activities separately, would be
consistent with the requirement that funds from agency rents and fees
intended for facility protection are used for that purpose. Also, funding
these activities separately would make it necessary for DHS to track them
and develop a way to account for their costs. Finally, ensuring a seamless
transfer of mission-support functions from GSA to DHS is critical. Given
the concerns about DHS’s ability to integrate FPS mission-support
activities, prematurely transferring these functions to DHS could negatively
affect FPS’s ability to carry out its mission responsibilities.
Recommendations for
Executive Action
We are making four recommendations to the Secretary of Homeland
Security. First, we recommend that the Secretary direct the Director of
FPS—in consultation with the Under Secretary for Border and
Transportation Security and the Assistant Secretary for Immigration and
Customs Enforcement—to develop and implement a transformation
strategy that reflects FPS’s consideration of key practices and addresses
the significant challenges it is facing. In particular, this strategy should
identify implementation goals, measures, and a timeline that FPS could use
to show progress toward its transformation and demonstrate that it is
accomplishing its mission while undergoing changes. It should also link
FPS’s goals and measures to the broader goals and objectives contained in
DHS’s strategic plan and to DHS’s ongoing integration efforts. In serving as
a road map for FPS’s transformation, such a strategy should be used by FPS
as a platform to identify strategies and proposals for addressing the
significant challenges that we identified—expanding mission and increased
responsibility, unresolved issues related to funding, and mission-support
challenges related to the eventual transfer of these functions from GSA to
DHS. Second, we recommend that the Secretary initiate a dialogue with
GSA aimed at resolving disagreement between DHS and GSA about
whether FPS has the authority to bill GSA’s tenant agencies for security
Page 28
GAO-04-537 Federal Protective Service
services. If this issue cannot be resolved, DHS should seek resolution from
OMB or the Treasury. Third, we recommend that the Secretary take
immediate steps to ensure that funds collected from agency rents and fees
are used in the future solely for the protection of buildings and grounds
owned or occupied by the federal government. If FPS continues its
involvement in activities not directly related to facility protection, a
funding process would be needed that is consistent with the requirement
regarding the use of funds from agency rents and fees. In addition, a means
of tracking these activities and determining related costs would also be
needed. Last, we recommend that the Secretary ensure that DHS is
prepared to effectively integrate FPS mission-support functions before
these functions are transferred from GSA, even if it is necessary to extend
the September 2004 goal for the transfer.
Agency Comments and
Our Evaluation
We provided a draft of this report to DHS and GSA for their official review
and comment. DHS provided its comments in a letter from the Director of
Resources, Border and Transportation Security Directorate, on May 3,
2004. These comments can be found in appendix II. As noted in DHS’s
letter, DHS also provided separate technical comments, which we did not
publish but incorporated where appropriate. The U.S. Secret Service also
provided some technical comments, which we incorporated where
appropriate. GSA provided its comments in a letter from the Deputy
Commissioner of the Public Building Service on April 29, 2004. In
commenting on this report, GSA also provided a legal analysis regarding
the authority to charge and collect FPS security fees. GSA’s position was
discussed earlier in this report, and its comments and legal analysis can be
found in appendix III. GSA and DHS comments on the historical gap
between security fees and costs were also discussed earlier in this report.
DHS concurred with our recommendations to develop a transformation
strategy, to ensure that agency rents and fees are used solely for facility
protection, and to ensure that DHS can effectively integrate FPS missionsupport functions before these functions are transferred from GSA. On the
basis of the comments we received from DHS and GSA showing their
continued disagreement on billing issues, we added the recommendation
aimed at resolving this disagreement. As a result, DHS did not comment on
this additional recommendation because it was added after the comment
period. Although DHS generally agreed with the report’s message and
concurred with the other recommendations, it took issue with certain
aspects of our analysis. DHS’s comments on the challenges FPS faces in the
contracting area were discussed earlier. In addition, DHS had comments on
Page 29
GAO-04-537 Federal Protective Service
several other aspects of the report, which are discussed below. These
related to the FPS Director’s discussion of delegations of authority for
facility protection, the extent of FPS’s authority to protect federal facilities,
the components of FPS security fees, funding for activities not related to
facility protection, and FPS’s need for a transformation strategy.
FPS Director’s Comments on Delegation of Authority for Facility
Protection—DHS said that we took certain comments made by the Director
of FPS out of context. DHS was referring to discussions we had with the
Director about expanding FPS’s authority to include protection of facilities
where GSA had previously delegated authority to tenant agencies. DHS
said that the Director was referring to efforts by the House Committee on
Transportation and Infrastructure, Subcommittee on Economic
Development, Public Buildings and Emergency Management, to suspend
further delegations of any authority for facility protection to GSA tenant
agencies. While the subject of delegation was discussed with the Director,
we disagree with DHS’s assessment that we took the Director’s comments
out of context. The discussions dealt specifically with existing delegations
and FPS’s desire to expand its responsibilities by “getting back” authority
for protection where it had previously been delegated by GSA.
Furthermore, the Director’s comments were not the only instance where
the issue of expanding FPS’s authority was raised. On four other occasions
during our review, top FPS officials, including the chief of staff, made it
clear to us that FPS may seek to expand its authority. This was also
discussed by an ICE official. And, because these issues dealt with possible
future plans, we included the Director’s caveat, in the report, that
expanding FPS’s authority is a long-term vision and that FPS is still
examining the feasibility of different options. GSA commented that it had
no objections to our interpretation of the Homeland Security Act and
agreed that FPS’s authority to protect federal property includes properties
under the custody and control of GSA, as well as those under the custody
and control of DHS. GSA also said that while FPS’s law enforcement
authority expanded under the Homeland Security Act, it defers to DHS on
the extent of FPS’s authority to protect other federal properties and
personnel.
Extent of FPS’s Authority for Facility Protection—DHS commented that
our description of its responsibility for protecting buildings, grounds, and
property suggests limitations that are not present in the law. In this regard,
for example, DHS takes issue with our statement that under the Homeland
Security Act DHS is responsible for protecting building, grounds, and
property “that are under GSA’s jurisdiction.” DHS states that “the Homeland
Page 30
GAO-04-537 Federal Protective Service
Security Act does not mention property controlled by [GSA].” In making
this statement—as well as others cited by DHS—the report summarizes
and synthesizes the relevant statutory requirements, rather than quoting
them verbatim. Thus, while it is true that the particular provision vesting
DHS with protective responsibilities does not mention GSA-controlled
property, DHS clearly acquired responsibility for GSA-controlled property
under the Homeland Security Act because FPS, which was responsible for
protecting federal agencies and previously under GSA’s jurisdiction, was
among those agencies whose functions and personnel were transferred to
DHS under the Homeland Security Act. Nonetheless, on the basis of DHS’s
comments, we have made technical clarifications to our descriptions of the
law, where appropriate.
In addition to raising technical issues, DHS makes several statements that,
although not entirely clear, could be read as suggesting that DHS might be
taking a broader view of its authority relating to the protection of federal
buildings and grounds than our analysis of the statute would support. The
relevant statutory provision is 40 U.S.C. 1315(a), as amended by section
1706(b)(1) of the Homeland Security Act, which provides that: “To the
extent provided for by transfers made pursuant to the Homeland Security
Act of 2002, the Secretary of Homeland Security…shall protect the
buildings, grounds, and property that are owned, occupied, or secured by
the Federal Government (including any agency, instrumentality, or wholly
owned or mixed-ownership corporation thereof) and the persons on the
property” [emphasis added]. DHS states that the description of the facilities
under DHS control in the latter part of the statute is “all inclusive” and that
the “intent of the law is far more inclusive than GSA property and property
transferred as part of the establishment of DHS, none of which are
instrumentalities nor mixed ownership corporations.” To the extent that
DHS is maintaining that its authority extends beyond property under the
control and custody of GSA and DHS, we disagree with its interpretation.
The statute provides DHS with authority over buildings and property only
to “the extent provided by transfers made pursuant to the Homeland
Security Act,” and thus DHS authority is limited to properties under the
control of GSA (through the transfer of FPS to DHS) and any other agency
whose functions were transferred to DHS under the act.
Security Fees—DHS said that it believes that our explanation for how FPS
is funded requires clarification because the report did not distinguish
between the two components of FPS security fees. According to DHS, FPS
was traditionally funded through rent portions devoted to recovering
security costs collected by GSA for space occupied by GSA tenants. These
Page 31
GAO-04-537 Federal Protective Service
“security fees” consisted of two separate components. The basic security
charge covered security services provided by FPS to all GSA tenants and
includes such services as patrol and response, security surveys, alarm
monitoring, salaries, and other common cost items. This fee was charged to
all GSA tenants and was included in each tenant’s rent bill as a part of the
rate per square foot. The building-specific security charge is for security
measures specific to a particular building based on the designated security
level that were specified by the Department of Justice in June 1995 in
response to the Oklahoma City bombing. For example, a Level IV building
may have more guards, magnetometers, and cameras than a Level I
building. The charges for building-specific security services are allocated
by GSA to tenants based on the number of square feet they occupy in the
building. DHS commented that our draft report did not clarify that security
fees for specific agencies vary depending upon the building and its unique
security requirements. DHS also noted that FPS uses a reimbursable
program to charge for security services that are in excess of what FPS
determines is sufficient for a building or could not be deferred for inclusion
in the next rent estimate cycle. DHS said that understanding how FPS
security fees are charged is important in understanding the issues
associated with how FPS security fees should be billed in the future.
Finally, DHS added that understanding the elements of the security fee
process is essential to understanding why DHS and GSA disagree as to how
security fees should be billed in the future. On the basis of DHS’s
comments, we clarified the information in the report related to the
different components of security fees.
Funding for Activities Not Related to Facility Protection—Although DHS
concurred with our recommendation to ensure that funds collected from
agency rents and fees are used solely for facility protection, DHS again
expressed its view that such activities would not have to be reimbursed if
they are of limited duration with local offices, ad hoc, and do not increase
the direct costs of FPS operations and investment in staff. DHS said it
proposes to issue guidance to this effect. DHS cited Comptroller General
legal decisions as a rationale for this position. DHS also said that some
activities that do not appear to relate to facility protection actually do
because of the proximity of nearby federal buildings. For example, DHS
said that FPS’s involvement in the free trade protests in Miami was critical
to protecting the facilities of agencies that were the focal point of the
demonstration. We recognize that there may be situations, such as the
Miami protests, where FPS may engage in activities that are necessary or
incidental to protecting federal buildings. Furthermore, DHS said that FPS
headquarters reviews and approves all FPS regional special operation plans
Page 32
GAO-04-537 Federal Protective Service
and expenditures to ensure the appropriate use of funds. DHS also stated
that in response to our report, ICE would develop guidance for determining
when it is reasonable for FPS to provide security services that are not
directly related to the protection of federal buildings and grounds.
We do not believe that the development of such guidance would be
appropriate. The language in section 422(b)(2) of the Homeland Security
Act of 2002 explicitly restricts the use of funds collected by GSA from its
tenants out of rents and fees “solely” for the protection of government
buildings and grounds.25 Because of this limitation in the statute, the use of
these funds for any purpose other than the protection of government
buildings and grounds would not be permitted absent reimbursement
pursuant to other applicable statutory authority. DHS refers to two GAO
decisions as supporting its proposal to issue guidance approving the use of
funds for unrelated purposes if such activities “are of limited duration with
local offices, ad hoc, and do not increase the direct costs of FPS operations
and investment in staff.”26 We do not agree that these two decisions support
guidance sanctioning the de minimis use of FPS funds for explicitly
prohibited purposes. The two decisions, in allowing nonreimbursable
details in certain circumstances, adopted guidance in the Federal
Personnel Manual, which has been rescinded and is no longer effective.
Moreover, to the extent that the two decisions are read by DHS as setting a
de minimis standard of general applicability, they are not in keeping with
the governing law on the de minimis concept. The legal concept of de
minimis typically goes to measure the amount associated with a legal
violation, allowing trivial or inconsequential amounts to be overlooked, on
a case-by-case basis. The concept has not been applied to, nor would the
case law support, the prospective approval of activities across an
organization like FPS, knowing that they constitute violations of law.
Accordingly, we would object to DHS establishing guidance for prospective
situations that would sanction FPS’s use of funds for de minimis
expenditures that are not incidental or necessary to the protection of
federal buildings and grounds. Our full legal analysis of this issue is
contained in appendix IV.
25
Public Law 107-296, 116 Stat. 2135, 2184-2185 (2002).
26
The two cited decisions are 64 Comp. Gen. 370 (1985) and 65 Comp. Gen. 635 (1986).
Page 33
GAO-04-537 Federal Protective Service
The Need For a Transformation Strategy—DHS concurred with our
recommendation that FPS develop a transformation strategy because of its
expanding mission and responsibilities, as well as the other challenges it is
facing. DHS said that in March 2004, FPS began developing its own
strategic plan, which DHS said would support the overall goals and
objectives of the DHS strategic plan and would be consistent with GAO’s
key practices for organizational mergers and transformations. At the time
of our review, FPS’s strategic plan had not been issued. Although a strategic
plan is an important part of FPS’s transformation, a transformation strategy
would contain information beyond what would be found in a typical
strategic plan. More specifically, a transformation strategy would provide a
connection between long-term strategic goals in its strategic plan and the
day-to-day activities of managers and employees engaged in achieving
integration of FPS into DHS.27 Such a transformation strategy would
include overall goals of the transformation with specific action plans and
milestones that would allow it to track transformation and integration
goals identifying critical phases and essential activities that need to be
completed by and on any given date.28 By demonstrating progress towards
reaching these interim goals, FPS can build momentum and demonstrate
that real progress is being made toward full integration into DHS.
In developing its transformation strategy, it is important that FPS also
consider all the key practices we have identified for effective mergers and
transformations. This would include incorporating a communications
approach that reaches out to employees, customers, and stakeholders and
seeks to genuinely engage them in the transformation process, as well
involving them in various aspects of the transformation to help gain
ownership of the transformation. For example, in our July 2003 report on
mergers and organizational transformations, we stated that according to a
JPMorgan Chase managing director, the chief executive officer and merger
implementation team publicized and reported progress on specific goals
for each phase of its merger to help rally employees and maintain their
drive towards reaching full integration. These goals were connected to
overall themes and particular milestones, and the JPMorgan Chase chief
executive officer reinforced these goals at leadership meetings and
27
For example, see U.S. General Accounting Office, Architect of the Capitol: Management
and Accountability Framework Needed for Organizational Transformation, GAO-03-231
(Washington, D.C.: Jan. 17, 2003).
28
GAO-03-669.
Page 34
GAO-04-537 Federal Protective Service
employee townhalls and in Web-based messages and other
communications.
As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution of it until 30 days from
the date of this report. We will then send copies to other interested
congressional committees, the Secretary of Homeland Security, DHS’s
Under Secretary for Border and Transportation Security, DHS’s Assistant
Secretary for Immigration and Customs Enforcement, the Administrator of
GSA, and the Director of OMB. Copies will also be available to other
interested parties on request. In addition, the report will be available at no
charge on the GAO Web site at http://www.gao.gov.
If you have any questions regarding this report, please contact me on (202)
512-2834 or at goldsteinm@gao.gov, or David Sausville, Assistant Director,
on (202) 512-5403 or at sausvilled@gao.gov. Other contributors to this
report were Kelly Blado, Casey Brown, Matt Cail, Anne Izod, and Susan
Michal-Smith.
Sincerely yours,
Mark L. Goldstein
Director, Physical Infrastructure Issues
Page 35
GAO-04-537 Federal Protective Service
Appendix I
Scope and Methodology
AA
ppp
ep
ned
nx
idx
eIis
To determine what challenges, if any, the Federal Protective Service (FPS)
has faced since it was taken out of the General Services Administration
(GSA) and transferred to the Department of Homeland Security (DHS), we
collected and analyzed agency documents about the transfer. This included
policies and procedures, information about the organizational structure,
and information on other issues related to the transfer, such as funding. We
also interviewed agency officials from DHS, FPS, and GSA headquarters
who were responsible for and directly affected by the transfer. After
identifying the challenges FPS was experiencing, we collected documents
and spoke to DHS and GSA agency officials about each challenge. To better
understand FPS’s responsibilities and mission, we reviewed relevant laws
and documents and interviewed DHS and GSA agency officials.
Specifically, we reviewed the laws relating to FPS’s authority both before
and after the transfer to DHS and analyzed the Homeland Security Act of
2002 to determine if FPS has gained any new legal authority under the act.
We also reviewed the operational memorandums of agreement between
DHS and GSA (for fiscal years 2003 and 2004) and other information, which
we verified, on FPS’s new Web site. We met with GSA officials to discuss
the types of services FPS provided for GSA before and after its transfer to
DHS. We interviewed DHS headquarters officials about the types of
security and protection activities FPS has been performing since the
transfer and their vision for the agency as part of DHS. Lastly, we spoke
with ICE officials to obtain an understanding of how they envision the role
of FPS within their organization.
With regard to funding issues, we analyzed agency budget documents and
interviewed DHS and GSA budget officials. Specifically, to identify how the
agency would be funded in fiscal years 2004 and 2005, we reviewed the
Homeland Security Act, the 2004 GSA and DHS appropriations acts, and the
President’s budget for fiscal year 2005 to determine funding FPS has
received and amounts requested. We corroborated funding data with data
from FPS and GSA, as well as OMB data provided for a related GAO
engagement. Lastly, we spoke with GSA and DHS budget officials about
how the agency was funded during the transition (fiscal years 2003 and
2004), how the agency would be funded in the upcoming fiscal year (fiscal
year 2005), and any alternate funding proposals for future fiscal years,
including fiscal year 2006 and beyond. To better understand FPS missionsupport issues, we reviewed the operational and mission-support
memorandums of agreement between DHS and GSA (for fiscal years 2003
and 2004) to determine what FPS mission-support systems would transfer
to DHS. We interviewed DHS and FPS mission-support officials in charge of
Page 36
GAO-04-537 Federal Protective Service
Appendix I
Scope and Methodology
managing all aspects of the transfer, including the transfer of FPS missionsupport functions from GSA to DHS.
We considered prior GAO work on major management challenges and
program risks of the DHS and challenges facing other DHS components,
such as the Immigration and Naturalization Service, the Federal Air
Marshal Service, and the U.S. Coast Guard. We considered prior GAO work
on key practices used by public and private organizations that have
undergone successful mergers and transformations. We did not do an indepth analysis comparing these practices with FPS’s transformation
efforts. However, we held discussions with FPS officials to obtain their
views on whether they were applicable to FPS.
DHS, FPS, and GSA provided much of the data and other information used
in this report. We noted cases where these officials provided testimonial
evidence, and we were not always able to obtain documentation that would
substantiate the testimonial evidence they provided. In cases where
officials provided their views and opinions on various issues within the
context that they were speaking for the organization, we corroborated the
information with other officials. We assessed the reliability of the funding
data by (1) performing limited electronic testing of the data elements; (2)
corroborating the data with FPS, GSA, and information obtained from OMB
for another GAO review; (3) interviewing knowledgeable agency budget
officials; and (4) comparing the data with other published data, such as the
fiscal year 2004 GSA and DHS appropriations acts. Overall, we found no
discrepancies with these data and therefore determined that they were
sufficiently reliable for the purpose of this report.
Page 37
GAO-04-537 Federal Protective Service
Appendix II
Comments from the Department of Homeland
Security
Page 38
Appendx
iI
GAO-04-537 Federal Protective Service
Appendix II
Comments from the Department of Homeland
Security
Page 39
GAO-04-537 Federal Protective Service
Appendix II
Comments from the Department of Homeland
Security
Page 40
GAO-04-537 Federal Protective Service
Appendix II
Comments from the Department of Homeland
Security
Page 41
GAO-04-537 Federal Protective Service
Appendix II
Comments from the Department of Homeland
Security
Page 42
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 43
Appendx
Ii
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 44
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 45
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 46
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 47
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 48
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 49
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 50
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 51
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 52
GAO-04-537 Federal Protective Service
Appendix III
Comments from the General Services
Administration
Page 53
GAO-04-537 Federal Protective Service
Appendix IV
GAO Legal Analysis of Issues Concerning FPS
Activities Not Related to Facility Protection
Appendx
i
IV
In its comments on this report, DHS stated that it plans to develop guidance
allowing the use of funds for activities unrelated to the protection of
buildings and grounds where the activities are de minimis. DHS refers to
GAO decisions as supporting the use of funds for activities that “are of
limited duration with local offices, ad hoc, and do not increase the direct
costs of FPS operations and investment in staff.” We do not agree with
DHS. We do not believe the GAO decisions DHS cites support the
implementation of the de minimis concept through guidance sanctioning
de minimis uses of FPS funds for explicitly prohibited purposes.
Under the Homeland Security Act, only the costs of services provided by
FPS personnel that are necessary or incidental to the protection of federal
buildings and grounds may be funded out of agency rents and fees.
Specifically, section 422(b)(2) of the Homeland Security Act of 2002 states:
“Any amounts transferred by the Administrator of General Services to the Secretary out of
rents and fees collected by the Administrator shall be used by the Secretary solely for the
protection of buildings or grounds owned or occupied by the Federal Government.”1
The language in section 422(b)(2) explicitly restricts the use of funds
collected by GSA from its tenants out of rents and fees “solely” for the
protection of government buildings and grounds. Because of this limitation
in the statute, the use of these funds for any purpose other than the
protection of government buildings and grounds would not be permitted
absent reimbursement pursuant to other applicable statutory authority.
Section 422(b)(2) recognizes that FPS funds come from rents and fees paid
by other federal agencies to reimburse FPS for services in protecting their
buildings and grounds. To permit DHS to use those funds for purposes
unrelated to the protection of federal buildings and grounds in effect would
burden those agencies with paying part of the costs of DHS’s mission
unrelated to the purpose for which they pay rents and fees. This practice
also would result in the unauthorized augmentation of DHS appropriations.
We are not questioning the policy judgment of DHS in making FPS
personnel available for those activities within DHS’s mission that are not
related to the protection of federal buildings and grounds. Rather, we are
questioning the use of amounts transferred by GSA to DHS, given the
restriction of section 422(b)(2) of the Homeland Security Act, for these
activities.
1
Public Law 107-296, 116 Stat. 2135, 2184-2185 (2002).
Page 54
GAO-04-537 Federal Protective Service
Appendix IV
GAO Legal Analysis of Issues Concerning
FPS Activities Not Related to Facility
Protection
DHS does not contend that the statute itself permits DHS to expend funds
for purposes other than the protection of buildings and grounds and, in
fact, DHS recognizes that if funds are used for unrelated purposes they
must be reimbursed. However, DHS claims that if the unrelated
expenditures are de minimis they need not be reimbursed, and DHS
proposes to issue guidance to this effect.
DHS relies on two GAO decisions, involving inter- and intra-agency details,
as supporting its proposed guidance. In the first decision, 64 Comp. Gen.
370 (1985), we held that, absent specific statutory authority, nonreimbursable details violate the purpose statute, 31 U.S.C. § 1301(a), which
provides that appropriations may be spent only on the objects for which
they are appropriated. However, we stated there were limited exceptions in
which non-reimbursable agency details may still be allowed. Under the first
exception, we recognized that non-reimbursable details would be
appropriate, and consistent with the purpose statute, where the detail
furthers a purpose for which the loaning agency receives appropriations.
Under the second exception, which DHS relies upon, we stated that we
would not object to details failing to meet the purpose test, as long as the
detail is de minimis and the fiscal impact on the appropriation is
negligible. In this decision, for purposes of defining de minimis, we
adopted guidance from the Federal Personnel Manual (FPM) relating to
agency details, and said we would permit “details for brief periods when
necessary services cannot be obtained as a practical matter by other means
and the number of persons and cost involved are minimal.” (64 Comp. 370,
describing FPM Ch. 300, subchapter 8, Inst. 262, May 7, 1981.) However, in
the second decision, 65 Comp. Gen. 635 (1986), we recognized that this
discretion had limits. There, we stated that the proposed transfer of 15 to
20 National Labor Relations Board administrative law judges to the
Department of Labor “far exceeds the exception for administrative
convenience we intended to establish.” We declined to state the dollar
amount or number of people participating in a detail that would be
considered de minimis. In fact, in subsequent cases regarding the detail of
employees under the Economy Act,2 we reiterated that the reimbursement
of the costs of detailed personnel the agency must recover must be based
on actual costs.3
2
Where no other authority exists, the Economy Act authorizes inter- or intra-agency
provision of services on a reimbursable basis based on actual costs. See 31 U.S.C. 1535 and
72 Comp. Gen. 159.
3
See, e.g., B-250377, January 28, 1993 and B-257823, January 22, 1998.
Page 55
GAO-04-537 Federal Protective Service
Appendix IV
GAO Legal Analysis of Issues Concerning
FPS Activities Not Related to Facility
Protection
As explained below, our opinion in 64 Comp. Gen. 370 does not support
DHS’s proposal to issue guidance authorizing de minimis uses of FPS
personnel and resources. The guidance adopted in our decision–the FPM–
has been rescinded and is no longer effective.4 Moreover, to the extent that
our decision is read as setting a de minimis standard of general
applicability, it is not in keeping with the governing law on this subject.
The concept of de minimis comes from the legal maxim De Minimis Non
Curat Lex— the law does not concern itself with trifles.5 This maxim, as
applied by courts and by administrative agencies in various contexts,
recognizes that a fact or amount may be so insignificant or trifling that it
can be overlooked in deciding a legal issue. It places intangible injuries,
such as those that are small and difficult to measure, outside the scope of
legal relief.6 In the context of appropriations law, we have occasionally
invoked the de minimis concept to analyze the impact on an appropriation
of past conduct alleged to be in violation of the law. For example, where
agencies have violated anti-lobbying appropriation act restrictions, we
have sometimes found the improper expense to be too small, or too
commingled with proper expenses, to warrant recovery. 7 In those cases we
used the de minimis concept to measure the amount associated with the
violation and not to prospectively sanction what would be a violation of
law. In a similar vein, the Justice Department’s Office of Legal Counsel
(OLC) has recognized that some activities may be so minimal, and so
4
See 60 Fed. Reg. 3055 (Jan. 13, 1995). The only current material on details is found at 5
C.F.R. Part 300, Subpart C which states that agencies may detail employees in accordance
with 5 U.S.C. 3341 (allowing details for not more than 120 days).
5
Black’s Law Dictionary 443 (7th ed. 1999).
6
See 27A Am. Jur. 2d. Equity § 118 and Swick v. City of Chicago, 11 F.3d 85 (1993) (In action
alleging he was deprived of property without due process of law under the Fourteenth
Amendment of the Constitution, police officer was not entitled to recover claimed damages
for injury resulting from being placed on involuntary sick leave because any injury was de
minimis, i.e., intangible, small, difficult to measure.)
7
In this regard, in several GAO decisions we found violations of anti-lobbying appropriations
act restrictions, but determined that the amount expended was nominal and not readily
determinable—e.g., the costs of preparing a letter or sending an e-mail—and that the efforts
to effect recovery would greatly exceed the amount to be recovered. See B- 285298, May 22,
2000; B-178528, July 27, 1978; and B-116331, May 29,1961.
Page 56
GAO-04-537 Federal Protective Service
Appendix IV
GAO Legal Analysis of Issues Concerning
FPS Activities Not Related to Facility
Protection
difficult to segregate from official activities, that the associated expenses
do not need to be separately tracked or reimbursed.8
To the extent generalities can be drawn from these cases, the de minimis
concept is most appropriately applied where amounts are not readily
determinable and it is clear that it would be difficult or impossible for the
agency to allocate the specific costs of an activity, such as the costs of
reading and signing a letter. However, the concept must be applied on a
case-by-case basis, depending on the unique facts and circumstances
involved, not routinely as DHS suggests. See 65 Comp. Gen. 635.
The guidance proposed by DHS would sanction uses of the FPS for
purposes unrelated to the protection of federal buildings and grounds, and
in our view this is not appropriate. In contrast to the kinds of situations
illustrated above, DHS and FPS should be able to identify costs of FPS
personnel used for such activities, since those types of costs can be
allocated on a daily, hourly, or other periodic basis. For reimbursements
under the Economy Act, recovery of actual costs is required.9 In fact, those
types of costs are commonly allocated when details or the costs of agency
personnel providing services to another agency are reimbursed by one
agency to another.10 While agencies may have flexibility in applying the
actual cost standard, there must be reasonable assurance that the
performing agency is reimbursed for its costs to avoid the ordering or
8
In 14 U.S. Op. Off. Legal Counsel 144 (1990), OLC dealt with use of facilities of the White
House Communications Agency (WHCA) for Presidential travel and communications. The
decision observed that appropriated funds can be used for Presidential media contacts only
with respect to official, as opposed to political communications, but in a footnote OLC gave
an example of a de minimis use of WHCA facilities. Specifically, OLC noted that “there will
always be particular instances when it will not be evident (and certainly not in advance)
whether use of a WHCA facility will be in furtherance of the President’s official, as
distinguished from his political responsibilities. For example, a presidential aide who
returns a reporter’s telephone call will not know until the conversation is over whether the
reporter is interested in political or official matters, or both. We believe that even when it
eventuates that the reporter’s inquiry relates more to the President’s political rather than to
his official responsibilities, WHCA may pay for such de minimis use of its facilities and that
special logs need not be maintained nor other monitoring methods employed…” 14 Op. Off.
Legal Counsel 144, at note 18.
9
See 31 U.S.C. 1535 and 72 Comp. Gen. 159 (1993).
10
See B-257823, January 22, 1998. (Direct and indirect costs of personnel allocated by
standard hourly rates for each general schedule grade level included salaries, benefits, costs
of management and support staff as well as overhead.) See also B-250377, January 28, 1993.
(Recovery of actual costs of detailed employees should be readily determinable by pay,
personnel and other records that disclose such information.)
Page 57
GAO-04-537 Federal Protective Service
Appendix IV
GAO Legal Analysis of Issues Concerning
FPS Activities Not Related to Facility
Protection
performing agency augmenting its appropriations.11 Furthermore, the de
minimis concept applies on a case-by-case basis. As noted above, the
concept of de minimis typically goes to measure the amount associated
with a violation or damages to be recovered. The concept has not been
applied to, nor would the case law support, the prospective approval of
activities across an organization like FPS knowing fully that they constitute
violations of law.12 Similarly, any violation of a statute, whether it be
characterized as de minimis or technical, is not permissible.13 For these
reasons, we would object to DHS establishing prospective guidance which
would sanction use of FPS funds for expenditures that are not incidental or
necessary to the protection of federal buildings and grounds.
As discussed above, section 422(b)(2) of the Homeland Security Act of
2002 explicitly directs that funds collected from rents and fees be used
“solely” for the protection of buildings and grounds, and the statute
recognizes no exceptions to this restriction. In most situations, it can be
determined prior to the activity whether it falls within FPS’s mission and is
necessary or incidental to the protection of federal buildings and grounds.
We recognize that DHS has some flexibility under 422(b)(2) of the
Homeland Security Act of 2002 in determining that certain uses of FPS
funds may be necessary or incidental to the protection of federal buildings
and grounds. For example, if FPS officers were engaged in crowd control at
the World Trade protests in Miami incident to their protection of federal
buildings during demonstrations, the expenditure of funds for such
activities would be allowed as “necessary” or “incidental” to the protection
of federal buildings or grounds. However, as we noted in the report, there
are other situations where the use of the FPS is not related in any way to
the protection of federal buildings and grounds and FPS funds should not
be used for such purposes without reimbursement. For example, officers
assisting other DHS law enforcement personnel in immigration-related
work such as “Operation Predator” or providing security at the Kentucky
11
See B-257823, January 22, 1998.
12
For example, when the Air Force proposed a change to a regulation relating to the
shipment of household goods, which would allow an agency disbursing officer to make a
known overpayment, the Comptroller General disapproved of the change noting that it
would essentially approve in advance violations of the law. 49 Comp. Gen. 359 (1969).
13
See, e.g., B-253164, August 23, 1993, in which GAO concluded that a seemingly “technical”
violation of the Anti-Deficiency Act by the National Labor Relations Board was still a
violation of the act and required a report to Congress and the Office of Management and
Budget.
Page 58
GAO-04-537 Federal Protective Service
Appendix IV
GAO Legal Analysis of Issues Concerning
FPS Activities Not Related to Facility
Protection
Derby is not necessary or incidental to the protection of federal buildings
and grounds. If the activity does not fall within FPS mission or is not
necessary or incidental to the protection of federal buildings and grounds,
then the costs of these activities should be identified and reimbursed by the
benefiting appropriation.
(543083)
Page 59
GAO-04-537 Federal Protective Service
GAO’s Mission
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO’s
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
Obtaining Copies of
GAO Reports and
Testimony
The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site. To
have GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select “Subscribe to Updates.”
Order by Mail or Phone
The first copy of each printed report is free. Additional copies are $2 each.
A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent. Orders
should be sent to:
U.S. Government Accountability Office
441 G Street NW, Room LM
Washington, D.C. 20548
To order by Phone: Voice: (202) 512-6000
TDD: (202) 512-2537
Fax: (202) 512-6061
To Report Fraud,
Waste, and Abuse in
Federal Programs
Contact:
Congressional
Relations
Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548
Public Affairs
Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470
United States
General Accounting Office
Washington, D.C. 20548-0001
Official Business
Penalty for Private Use $300
Address Service Requested
Presorted Standard
Postage & Fees Paid
GAO
Permit No. GI00